Consider the stylized example of Figure 7.3, in which there is a jump in the mean value. Using the same
FIGURE 7.3 Moving- Average Calculations in a Stylized Example
a. Take a = 0.2. Calculate the forecasts generated by exponential smoothing, and compute the values of MSE, MAD, and MAPE for periods 10-15.
b. Repeat the calculations in part (a) but with a = 0.6.
c. If we suspect that there might be a jump in the underlying process, which of the two values of a examined in parts (a) and (b) would be preferred?
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